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Japan, S’pore REITs Outperformed Equities; Mitsubishi Estate Logistics, Keppel DC Up

Japan, S’pore REITs Outperformed Equities; Mitsubishi Estate Logistics, Keppel DC Up

By Patrick Ma, Director, Listed Products and Research

Asia Pacific’s top 100 most traded REITs climbed 3.1% in July with Japan logistics REITs showing substantial gains. Across most markets, strength in industrial and logistics REITs helped to offset weakness in retail and hospitality REITs. 

Overall gains in the market were underpinned by positive sentiment over low-interest rates and a weakening US dollar. However, REITs’ advances still lagged regional equities, which climbed 3.4%.

Australian REITs underperformed domestic equities as the retail sector remained weak following a resurgence of COVID-19 cases in Victoria. Global logistics player Goodman Group led gains for the month with an increase of 14%. Retail REIT Vicinity fell 8.7%. 

Hong Kong REITs also underperformed local equities. A similar resurgence of COVID-19 cases had put downward pressure on retail REITs. 

In Japan, logistics REITs such as Mitsubishi Estate Logistics REIT Investment and Mitsui Fudosan Logistics Park climbed more than 20%. However, hospitality REITs such as Japan Hotel REIT and Ichigo Hotel REIT dropped 14.3% and 17.2%, respectively. 

Similar patterns were observed among Singapore REITs: industrial REITs such as Keppel DC REIT and Mapletree Industrial Trust had led the sector with 17.3% and 13.6% increases, respectively. The worst performer was Ascott REIT, with a 10.5% decline in the month.

Looking forward, a weak USD and low-interest rate expectations will underpin the future performance of Asia Pacific REITs. Meanwhile, investors will be keeping a close watch COVID-19 cases around the globe. The development of a vaccine will be a crucial factor that will help overall market recovery.

REIT Index Corresponding equity index

Jul 2020 YTD-2020
Jul 2020 YTD-2020
GPR 250 REIT Index  3.8% -18.3% MSCI WORLD 4.8% -0.9%
GPR Aprea Investable REIT 100 Index 3.1% -16.7% MSCI AC ASIA PACIFIC 3.4% -3.1%
GPR Aprea Investable REIT Australia 1.8% -21.8% MSCI Australia 4.5% -10.0%
GPR Aprea Investable REIT Japan 2.4% -18.3% MSCI Japan -1.6% -8.4%
GPR Aprea Investable REIT Singapore 5.7% -6.7% MSCI Singapore 0.2% -21.2%
GPR Aprea Composite REIT Index Hong Kong -2.6% -23.3% MSCI Hong Kong -0.7% -10.4%
Based on the market close on July 31, 2020

All performance numbers are based on total gross returns in USD

Sources: GPR and Bloomberg